This Article is From Oct 13, 2020

"Mere Announcements": Congress On Finance Minister's Stimulus Package

Congress said Finance Minister Nirmala Sitharaman has given a new definition to "fiscal stimulus" by announcing measures that she thinks would stimulate demand and investments.

'Mere Announcements': Congress On Finance Minister's Stimulus Package

Nirmala Sitharaman announced a Rs 73,000 crore package on Monday (File)

New Delhi:

The Congress on Monday said the government's measures of providing LTC benefits and a festival advance to its employees are mere announcements and a fraud with people to make headlines that would not help boost demand in the economy.

Addressing a joint press conference, Congress leaders Gaurav Vallabh and Praveen Chakraborty said Finance Minister Nirmala Sitharaman has given a new definition to "fiscal stimulus" by announcing measures that she thinks would stimulate demand and investments.

They said the minister has given the government employees their own salary and money and has now directed them to spend according to her wishes.

"The measures announced today are merely announcements. There was no extra spending to boost demand and the increase in the states' capital expenditure is paltry and untimely. This is yet another vindication that the Modi government is at its wits' end when it comes to managing the economy," the Congress leaders said in a statement.

Mr Vallabh, who is the party's spokesperson said Ms Sitharaman has belatedly realised that consumer demand needs to be stimulated in the economy, something that the Congress and many economists have been calling for the last six months.

"I call upon the government to bring concrete plans for stimulating demand in the economy and bring it out of the current recession. I also urge the government to provide more money in the hands of people and stop befooling the people," he added.

Critical of the measures announced on Monday, Mr Vallabh said "it is like taking out money from one pocket and putting in another. By doing so, you are committing a fraud with the people of the country".

He said by these measures, the government is hitting the tourism industry and urging employees to give a boost to the FMCG sector.

Mr Vallabh said the finance minister first announced a hastily designed economic package that had no impact.

"It was also a clear admission that the much hyped Rs 20 lakh crore "Aatmanirbhar" plan announced by the Prime Minister in May is a dismal failure in protecting and reviving India's ravaged economy.

"But, evidently, lessons from that experience have not been learnt yet. Just because the PM or the FM call these measures an economic stimulus does not mean the economy will obey and get stimulated. The economy cannot be dictated to or swayed by headlines," he noted.

Chakravarty, the chairman of the All India Congress Committee's (AICC) Technology and Data Cell, said the Congress has been calling for implementation of the NYAY scheme proposed by it by giving money directly in the hands of people to help stimulate demand.

"It should truly be cash in hand and not diversion of cash from one area to another like the government has announced in case of the LTC cash voucher scheme and festival advance," he said.

The Congress leader said unless there is additional money, people are not going to spend more and asked where is the demand stimulus.

On capital expenditure in states, he said it is a policy in the right direction, but the Centre must give more money to the states.

Mr Vallabh pointed out that the finance minister announced an extra Rs 12,000 crore to the states for capital expenditure, which is a paltry 1.3 per cent of the states' total capital expenditure budget of nearly Rs 9 lakh crore for financial year 2020-21.

The amount is no more than a "lame joke on the economy", he said, asking, "What effect will a 1.33-per cent increase in capital spending by states have on the economy?"

Ms Sitharaman announced a Rs 73,000 crore package on Monday, including advance payment of a part of wages to central government employees and cash in lieu of LTC, to stimulate consumer demand and investment in the economy damaged by the coronavirus pandemic.

As much as Rs 11,575 crore would be paid as LTC allowance and advance to central government and PSU employees on the condition that they spend on non-essential goods before March 31, she said.

The states would separately be eligible to get Rs 12,000 crore in 50-year interest-free loans for capital expenditure, while the Union government will spend an additional Rs 2,500 crore toward capital expenditure on roads, defence infrastructure, water supply and urban development.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)